The Web site for Paul Harris Stores Inc. bears the motto "Life goes on." For the 47-year-old women's clothing chain, life will end in about mid-May.
Employees at the Paul Harris stores in Valparaiso and Hobart were preparing for the liquidator's visit Tuesday following the announcement the remaining 166 stores in the chain are closing.
Valparaiso store Manager Jodi Dusek said the 12 employees heard about the closing Monday, and Dusek expected to talk to the liquidator today. The store, located in the County Seat Plaza, has 12 employees, and Dusek said the chain has not said anything yet about helping employees find jobs elsewhere.
The manager of the Hobart store, located in the Southlake Mall, declined any comment on the closing.
The bankrupt retail chain, which opened its first store in Plainfield, Ind., in 1954, was the creation of two Indianapolis men, Gerald Paul and Earl Harris. The Web site states the chain had over 250 stores in 28 states with over 3,000 employees, but the company announced in January it was closing 50 stores, including its flagship Indianapolis location.
In February the company announced it would close 100 stores, and Monday's announcement it would close its remaining 166 stores this spring came after efforts to obtain financing failed.
The company announced Monday it had started developing a liquidation plan after suppliers and lenders decided not to support a reorganization plan it filed last month with the U.S. Bankruptcy Court.
The closing will cost 1,600 store employees their jobs along with the loss of about 140 jobs at the company's Indianapolis headquarters.
"Over the past 12 months the management team has diligently worked to improve all areas of our operations," said Glenn Lyon, the company's president and chief executive officer. "However, we were unable to obtain the bridge financing and vendor cooperation necessary to sustain the company through the confirmation of the reorganization plan."
Paul Harris' stores are expected to close by mid-May. The company last week asked Bankruptcy Judge Basil Lorch to authorize a March 21 auction of the remaining stores' leases if its debtors chose to close the stores, said David Sease, a spokesman.
Company officials, creditors and Lorch held a conference call Monday morning to discuss severance payments to more than 100 employees, including Lyon.
Paul Harris filed for bankruptcy court protection in October. Last week, the company's stock was trading at just 25 cents a share, down from almost $30 a share about 3.5 years ago.
The largest secured creditor is LaSalle Bank, the weekly Indiana Business Journal reported over the weekend. As of late last year, the bank was owed more than $30 million, the report said.
A year ago, Paul Harris operated more than 300 locations. It filed for Chapter 11 bankruptcy protection in October after sales lagged for several months.